5 tips to make breaking into PE easier

Breaking into private equity can be tough. The firms are highly selective, the interview process is rigorous and there’s a lot of competition.

Some applicants need help. I recently witnessed an MBA student pitch himself to Brian Rich, Catalyst Investors‘ managing partner and co-founder, at the Columbia Business School Private Equity & Venture Capital Conference last month.

Rich had just finished speaking on a panel. The student, after waiting in line, introduced himself and then lobbied Rich for a job at Catalyst. The candidate emphasized his background in emerging markets.

“We are a North American-focused growth equity firm,” Rich said.

The student repeated his wish to work in PE and his experience in emerging markets. “We are a North American-focused growth equity firm,” Rich said again.

The brazen student then asked Rich why Catalyst didn’t go into emerging markets. Finally, after some moments, the applicant went away.

The candidate’s main error? He was unprepared and ill-informed. MBA candidates, before they pitch themselves, should be familiar with the firm they are talking to. Some firms are U.S. focused, some target Europe, some are general investors. Know this before you pitch. “Go hard after the firms that are a great fit with your background,” Rich said in an email.

Here are some other tips:

1. Network, network, network. The private equity world is a very tight community and those who “work at it” are more apt to differentiate themselves, Rich said. Consider the students who spent all that time putting on the Columbia PE conference. “They now have exposure to guys like me,” Rich said. Another PE exec, who wished to remain anonymous, suggested following the money. Those PE firms that are fundraising are more apt to hire new people, the source said.

2. Develop an investment thesis before you come in for an interview, a second anonymous PE source said. Then provide the companies to back it up. This can be something like how Obamacare is going to change the healthcare landscape and what companies will benefit/lose from the law. “As soon as you can, start developing a skill for evaluating businesses like an investor,” the second PE person said.

Lee Gardella, an MD with Adveq in the U.S., said applicants should come to interviews with some knowledge about the private equity business. “Don’t tell me what you’ve read in the Wall Street Journal,” he said. “Do some research and take an interest in the segment that’s more than you heard it’s a great place to get a job.”

Adveq is looking for an associate in New York and has received about 300 resumes in two weeks, Gardella said. The quality of applicants is “pretty good,” he said. Applicants should have an interest in PE beyond the surface. “Have a sense who our competitors are and how we fit into the marketplace,” he advises.

3. Be different. PE firms want to see original thought, Rich said. Once you get in the door and have an interview, tell the PE executive something they don’t know about their portfolio or about their competitor’s portfolio, he said. “Do something that differentiates you, because there are a lot of smart people out there,” he said.

4. Choose wisely. A very common mistake is to pick the PE job that pays the most. Instead, spend some time to find out the culture of the firm and if it fits you. As the first PE source said, “A career involves a lot more than money. Being frustrated daily is very unrewarding.”

5. Above all, be polite. Think twice before you interrupt a private equity executive when they are on the phone, talking to someone else or at the grocery store. It’s a fine line between being aggressive and annoying, Rich said, and harder for a younger person to know where that line is. Err on the side of conservatism, he said. “An applicant has numerous chances to impress, but can turn someone off in one shot,” Rich said.

The proper way to introduce yourself? Through a contact or some other business channel, the first unnamed PE source said. You can also use email, but Rich, who estimates that he gets at least 10 email blasts a day from candidates, said he rarely reads them. But always be polite and gracious. “If someone decides to put their time ahead of mine that eliminates them on rudeness alone,” the anonymous source said.